"Buy a Used Jet?"
There's Never Been a Better Time To Buy
This column is copyright © 2008 NARA. National Aircraft Resale Association (NARA) is aviation's largest professional organization of pre-owned aircraft brokers and dealers. NARA's mission is to improve general aviation through the ethical, informed transactions conducted by its members as they serve buyers, sellers, owners and operators of turbine aircraft. www.pre-ownedjets.com
If you've ever thought of owning a business jet, there's no time like the present. Pre-owned aircraft market forces are making for some great bargains. But they may not last long.
But first, a little history: The late-1990s saw an unprecedented boom in business jet orders from OEMs like Dassault, Cessna and Bombardier. From small Learjets to roomy Gulfstream Vs, the large number of new aircraft orders sent the pre-owned market soaring as well. Fueled by dot-com cash and new economy timeframes, jet purchases by corporations and high net worth individuals reached an all-time high.
But after the economic downturn of 2000 and 2001, the pre-owned market had record numbers of turbine aircraft available for sale. Normally, 10% of all business jets are for sale at any given time. But at the turn of the millennium, that number doubled. A few highly sought after models were able to maintain their values, but many older aircraft became un-sellable at any price, except for parts.
Now that the economy is rebounding and corporate scandals have taken a back seat to better economic news, prices on pre-owned turbine aircraft have started to rebound. Most experts agree that the bottom of the market has been reached, and prices are slowly coming back up. In fact, many of the best bargains have been snapped up.
Nevertheless, it is still a buyer's market, says National Aircraft Resale Association (NARA) President Susan Sheets. "Prices are still lower than they have been in years, making for some great investments and great productivity." NARA is the industry's leading organization of pre-owned jet brokers and dealers. The organization's 25 members account for about one-fifth of all business jet transactions in the US. NARA has also authored and promoted the pre-owned jet market’s most stringent ethical guidelines for conducting aircraft transactions.
Another factor in the increasing interest in pre-owned aircraft is that it is a logical next step for many fractional aircraft owners who seek a higher level of control of their aviation assets. "Once a certain number of hours per year is reached, it makes economic sense to move to full ownership," says Dan Dickinson, president of General Aviation Services and Chairman of NARA. "And the most affordable approach to ownership is finding the right pre-owned aircraft."
Though many of the best bargains have been scooped up, there are still opportunities to purchase aircraft below their price levels of just a few years ago. With commercial air travel hassles, security screening and even the unproductive time of driving to and from major airports, the decision to purchase a pre-owned aircraft for company use is becoming an increasingly viable business decision.
This article is included in Gulfstream Contract Pilot Services' resource library strictly for your convenience. The information in this article is provided without guarantee or warranty, and is subject to change without notice. The information is the opinion of the writer, and may not reflect the opinion(s) of Gulfstream Contract Pilot Services or it's associates. The information should not be relied upon as advice to help you with your specific issue. We recommend that you discuss the specific facts of your situation with a qualified professional before making any personal or business decisions.
